Diaceutics (LSE:DXRX) Q4 2025 Earnings Call

0:00 Good afternoon and welcome to today's webinar hosted by Diocytics to discuss the company's full year 2025 results issued earlier today. My name is Simon Guilon and I manage Diocytics IOR program. On the call today to discuss the results are Ryan Keeling, CEO and Nick Roberts, CFO. Before I hand it over to Ryan for his formal remarks, I would draw your attention to the forward looking statement slide in our presentation, which is on screen now and can also be downloaded at diocytics.com. At this time, I will now turn the call over to Ryan. Ryan, please go ahead. Thank you, Simon. Good afternoon. Good morning, everybody. From a very warm, should I say hot London, where we are on day one of our Investor Roadshow.

0:51 Delighted you all could make some time to be with us today. And Nick and I are going to I'll walk you through the highlights of 2025, of which there are many. I wanted to start at maybe taking a step back and looking at the 25 year as a whole. It was an important year for Dynastatics and in many ways a validating year for the model. We delivered 20% revenue growth, that was 24% of constant currency. in what was probably the most challenging commercial environment we've experienced in the US pharma market certainly in the time trading history of diastetics.

1:42 But despite that disruption across the sector particularly through Q2 and Q3 where we saw quite significant shifts in policy and ultimately the operating environment for our customers We still felt we put in a very strong year. We expanded ARR by 19%. We increased our adjusted EBITDA by 80% to £7.6 million. We delivered a 20% EBITDA margin and returned the business to profitability. More importantly, and very aligned to the strategy that we're on as a business, the quality and visibility of the revenue base continue to improve. We closed the year with a record 38.9 million pounds in order book, including 21.1 million visibility into FY26, giving us increased visibility over the year's revenue and indeed 27 and 28 are also building well.

2:43 We also grew alongside subscription revenue, enterprise engagements and PMX adoption. All of these will get into more detail in a moment. Strategically, the business strengthened meaningfully during the year. We now have 10 enterprise wide farm engagements. We work across 95 brands and 53 customers and we signed our second PMX customer. Really symbolic for us and we'll talk a lot more today about PMX. It has a real halo effect on the business and is dragging up the average revenue per brand across the portfolio. and behind PMX, we now have a pipeline of 24 potential PMX opportunities and really heartened to see that eight of those are already spending with us today. They're not spending at PMX levels.

3:37 We can't call them PMX customers yet, but the strategy there is to to grow these customers that we have identified as PMX targets. We're having that conversation with them. We've pitched PMX to them from day one. These are biotechs predominantly, and we believe that we can convert a sizable number of those into full-blown PMX opportunities, whether we are extracting two, three, four million dollars per year average revenue. We also continue to invest deliberately in the long-term scalability and strategic value of the platform, particularly through US focused data assets and support our precision for all strategy. We'll talk a lot about precision for all.

4:27 It's a very exciting growth opportunity. You heard us last year talk about the TAM expansion and what we saw there. Precision for all is really the further articulated view on what that time expansion could look like and we have a lot of validation now through existing sales into customers that are embracing that precision for all approach. Nick is going to walk through the financials in more detail including cash working capital I know that's a key area to dig into today as per some of the analyst notes that are out and we'll get into that but at a high level we view 25 as a year where the business became more recurring more visible more profitable and more strategically embedded with customers the fundamentals of this business are really going from strength to strength and we exit the year stronger. I said we have more customers, more brands, more recurring revenue, higher visibility, expanding margins and a significantly larger long-term addressable market opportunity. Sets us up really well for continued growth, continued success and as we dive more into the financials and ultimately the narrative, we can bring some of this to life for you.

5:48 I'm going to pass now to Nick, my CFO, to walk you through some of the financials. Next slide, Simon, thank you. Over to you, Nick. Thanks, Ryan. Sorry about that. My bad. So just apologies. Sorry about that. So yes, I'll just cover off briefly. And I think Ryan's touched on many of these points, but the financial strengths of the business, both seen in 2025 and in past years, and hopefully you're seeing build up in the guidance for future years as well. So a return to profitability in 2025, I think a really important milestone as planned and and with margins that we expect to see improve over time. So whether that be gross profit margins, adjusted EBITDA margins or indeed overall profitability, so profitability before tax.

6:50 a revenue tagger over the last three years of 25% again echoed in 2025's result driven by the number of brands that we're working with and ultimately number of customers and the average revenue per brand. They're the two important drivers and a bit later I'll talk about the addressable market opportunity and how we're driving to more customers, more brands and how we've invested in data to do that. We see growing ARR revenues and future visibility through an increased order book. Ryan already mentioned 10 enterprise-wide engagements with blue chip pharma customers, which is fantastic, and a strong balance sheet, 7.3 million of cash. And a reminder, we have no debt.

7:36 Simon, can we go to the next slide, please? So let me just cover off the key financial metrics for the year. We have revenue at, I see Simon's just trying to get the right slide there, but I'm sure we'll get there in a minute. Let me carry on talking. We have revenue of £38.4 million, up 20%, and that's 24% on a constant currency basis. And again, I already spoke to this, that 25% per year CAGR. fantastic top line growth and as Ryan said in what is challenging market conditions for pharma. the ARR is up to 20 million pounds up from 16.8 million so up 19% almost 20% the NRR for last year was 105% that's down four percentage points on 2024 and we did see and we did observe some churn earlier in the year probably because of those more challenging market conditions for pharma but are very comfortable that that is under control and we've seen a trend of higher NRR both in the back half of 2025 and the start of 2026 which is really important.

8:57 Ryan already spoke very nicely to our order book and we're seeing growth there not just near term in terms of the next 12 months but we're seeing a return to growth in the 24 and 36 month outlook as well and that's giving us confidence and it's giving us more visibility over our revenue and our future growth rates. On to profitability. Our gross profit margin reduced slightly from 87% to 82%. The primary reason, indeed the whole reason for that reduction in gross margin was some data spend, 2 million a data spend, which was expensed through the P&L through COGS. during 2025.

9:42 That data was a new data set. There are several new data sets in there and was an opportunity to start increasing and investing in future TAM areas. And I'll talk more about that investment and what it opens up in terms of TAM and market opportunity on a later slide. The adjusted EBITDA for 2025 was £7.6 million, slightly ahead of consensus guidance, that's up 80% and a margin of 20%. That's up from 13% margin and £4.2 million adjusted EBITDA in 2024, a significant milestone. and it's that drive and operational scale that we're seeing drop down further. So profit before tax, 300,000.

10:29 So just about break even compared to a loss before tax of 1.9 billion in 2024. So definitely seeing that increase in both revenue growth scale in terms of profitability and then that dropping down to overall profit. I'll just finish on the cash here. We finished the cash at 7.3 million. So that's down on the 12.7 million at the end of 2024 and a free and a cash outflow of 5.3 million. The primary reasons for driving that free cash outflow I mentioned earlier, the 2 million we spent on data and expanded time that opens up. but also we noticed particularly during Q3 and then into Q4 later phasing of revenues so the farmer pausing some of the spending decisions in the year making those decisions bringing them back online later in the year but that in itself although the revenue landed in Q4 then the invoicing the cash has then pushed across the year end and into early 2026.

11:37 We also saw Pharma take some shorter term decisions around delaying credit terms. We still have no bad debts in the business, which is very positive and probably expected given the blue chip customer base we have. But it hasn't meant or it's still meant that they have pushed out their credit terms, even though there's aren't bad debts. And finally, just in terms of the cash, and we can touch on this in a bit more detail, we saw some M&A spend during the year, around about half a million pounds, as we start to invest in and explore non-organic growth methods to augment that strong 25% per year candidate that we have.

12:23 Simon, can we go to the next slide? Oh, sorry, you're already there. I'll come back in. Thank you, Nick. Those of you who have been following us for some time, you'll have seen this slide every time we present. So I'll not deliberate on it too long, just to remind us kind of what the fundamentals of the business model is. We have invested over the last 10 years in building out a network of laboratories that we partner with in order to get access to diagnostic information pertaining to what disease a patient has. I'm obviously simplifying here quite significantly. and that data in itself is transactional data that is derived from the clinical diagnostic activity performed by these laboratories but the real value to us is it tells us in close to real time what disease a particular patient has assuming of course that disease is diagnosed with a lab test and that is the data that is effectively the lifeblood of diastetics we leverage that in our our lead product called signal but we've also built a series of services and other products that that accompany signal and our advisory services that that did now form a full suite you've heard us reference PMX and we'll talk more to that but that really is the the the foundation of PMX

13:54 is the lab network The problem that we're solving here is effectively helping pharmaceutical customers large and small to better target, better promote a potential treatment to a physician who has a patient that is very recently diagnosed with a disease that the drug is intended to treat. and that's different to how the market approaches drug promotion and targeting today and is something that is both helpful in terms of driving the top line for pharma but also managing their cost base giving us a much more targeted and less resource intensive way to go to market.

14:45 Core to what we have been investing in as a business, and this was largely investments that we started in 2023, 2024 and again in 2025. is how we have embedded AI. I feel we were a very early adopter of AI. If you go back to some of our really early press releases and RNSs, you'll see that we had a partnership with Intel as far back as 2018. I remember when they shipped us some hardware, it was half the size of our office at that time. So we've come quite a long way in terms of the agentic AI that we're leveraging today in the cloud. but we feel the past weeks will be an AI winner if we aren't already.

15:32 We are doing the obvious things you would expect any business today to be doing with AI in terms of operational leverage and the things that AI are really good at as it pertains to data operations, ingestion, normalization, unstructured extraction, etc. We have really heavily adopted AI and our I believe on the outer edge of performance there as it pertains to that particular use case. We've also embedded AI now in our product roadmap so our products are better informed and ultimately leveraging AI as we go to customers and that's effectively manifesting in enhancements to how we signal and activate through our data. and that includes integration into our customers workflow, intelligence and starting to get toward next best action capabilities.

16:33 We're not a next best action company. There's lots out there who are doing that, but we're certainly enabling and working around that to better inform next best action. and the moat you know is obviously really important as we look at the defensibility of our business and proprietary data is core to that moat but how we've leveraged AI to really combine our proprietary diagnostic data, disease specific logic and workflow integration making it harder to replicate what we do with laboratories and I think that's something that is ultimately alongside the AI enablement in the product roadmap and the how it's embedded in our data operations it gives us a real enabler in AI and we think we will be an AI winner here in terms of the business we have the expectations of customers and how we're leveraging it in the business today as well as helping us actually defend the business model and certainly from and AI native Claude type threat. We have key assets here that are very hard to replicate even for AI than they would have been and the fundamentals are still very secure.

18:03 Next slide please. Thank you. Slightly rework this slide. This is our lead product signal and effectively what we want to call out here is we now have a lot of evidence to show how signal is impacting and benefiting our customers in the market. Remember the challenge here is that we're trying to identify patients in as close to real time as possible that have a specific, in this instance, a mutation in lung cancer. We're trying to intervene with the treating physician for that patient at a moment in time when there's a treatment decision being made and the timing of that is really critical and the impact ultimately for our customer is that they give more patients on the drug and in this example this is real customer data shared back with us we're showing a sustained uplift where effectively after we switched on our signal product we're more or less double the number of patients and that's growing slightly over time but key to this is it's sustaining. It does drop off because ultimately it's not that we're finding more physicians where the real-time nature of the data is critical in terms of how it's enabling pharma to promote their asset, their brand to a physician at exactly the right moment.

19:26 The ROI here you can see is clearly outlined and our ROI analysis is I guess somewhat subjective in that you have to have a lot of variables fitting into it, drug pricing and then there's discounting they can apply after the effect etc, how long the patient stays on drug, there's lots of variables and you guys as analysts will understand those but on average and as we look across the portfolio it is not inconceivable to see that Our ROI is very significant. In this example, it's $250 for every dollar they're investing with Diasytics. Next slide, and then I'll pass back to Nick.

20:16 Again, for those of you who have been following us, you'll have seen that while the business has been very focused on precision medicine since its inception, that's the thing that has been most consistent about Dianesthetics is we've been very focused on precision medicine. And to a large extent that has meant oncology, precision medicine oncology is kind of where it shines brightest. Through engaging with our customers over the last few years we can see that they want to apply our model into non-precision medicine areas and these are areas like immunology, cardiology, nephrology and areas that are diseases that are identified and diagnosed with a lab test they wouldn't be precision medicine per se by the strictest definition they don't have a biomarker or companion diagnostic type play that we would see in oncology but it's very clear that the advantages that we have in precision medicine around data timeliness and patient characterization are also very applicable outside of precision medicine So precision for all is our effectively the concept behind how we want to go to market to address a much broader market opportunity.

21:37 We are already selling to customers. that are in normal precision medicine and that's some of our largest customers but also some brand new customers some of the data that we acquired off the back end of last year that Nick referred to was to enable that growth into precision for all and really chase that time expansion opportunity and we'll report out as we go on this because we feel it's a very exciting evolution for the business and something that now has real evidence to support our ambition into be much more enterprise wide for our customers to put that in context if you take any typical big pharma today top 10 pharma those who have a precision medicine focus maybe 25-30% of their brands are precision medicine if we apply a precision for all you're now talking about maybe 80% of their brands that makes us much more applicable at an enterprise level and affords us the opportunity to perhaps start to think about how we sell that to an enterprise level beyond the brand Silo, good brand approach that we're taking today.

23:00 Later in the year, we will relaunch the brand. We did some significant work with our marketing agency to have the brand in the first place. So I want to say relaunch. This will be the first time we've ever done any significant marketing. But core to that principle will be positioning diastetics to be very applicable in precision for all, as opposed to the more pigeonholed precision medicine that we've been in historically. Next slide Simon. Nick, do you want to talk to PMX? Yes, thanks, Ryan. So I think most of you are familiar, but let me just touch on what PMX is. We launched this around a commercialization solution. So as it says in the top line here, it's insight-led, so it's data-led, expert-built commercialization model specifically for precision medicine and rare disease therapies.

24:03 So around our existing solutions is tailored for a customer to ensure that you're hitting all of these five points below to ensure that the customer is understanding the market and the behavior of prescribing and testing in that market, driving faster test adoption, finding patients, so talking to that ROI, that case study that Ryan showed earlier, It's about personalised direct to physician omnichannel, so digital marketing, right at the point of time where they're making treatment decisions. And it's about the last mile, which is driving education and adoption through conversation at the point where education awareness is needed and that decision is making a treatment decision on patients, which is absolutely key and really fundamental to our data set and the way that we've built our business.

25:04 We currently have two PMX agreements which are live. Ryan mentioned these earlier. One is with a partner, Feriputics, who we've been working with for around about 18 months. The other one was a novel US Oncology Asset with a biotech who we started working with in Q3 of 2025. This PMX agreement started off as a signal. It slowly moved on to the, quickly moved on to physician engaged. And then it's finally gone on to the expert exchange, that peer-to-peer conversation. And those being the three tenants of PMX, that became the PMX engagement at the end of last year.

25:51 PMX has a significant impact on not just the number of brands that we can add, but also the average revenue per brand. The average revenue per brand across all of our brands is some £430,000 per year. The average revenue for a PMX brand is between £1.5 to £3 million of revenue per year, so it's significant. multiple, three to six times. We have 24 PMX pipeline opportunities, which are ideally moving towards PMX, but at the very least, we will look to move them to be customers of Diastutix and Engage around one of our solutions, be it Physician Engage or Signal or some of our consulting and scientific services.

26:38 And we have eight potential PMX customers that are currently buying solutions for us that we have targeted and had discussions to move them on that journey from a buyer of one service to a buyer of multiple and ultimately the PMX solution. Simon, could you go to the next slide, please? and I won't spend too long on this slide we've had this in the deck in the past it outlines what are the five key stages that our customers think about launching their brands into the market and it links our individual solutions below those if you would like like that's the a la carte menu that customers can buy from that we sell from and if they were to adopt the three key tenants of that plus some additional services they effectively get the PMX wrapper and that's an end-to-end solution which would cover the dark blue on the left all the way through to the green on the right.

27:37 I'll just finish off on PMX by articulating some of the tangible results we're seeing. First of all, and I talked to this earlier, it's a significant increase in the average revenue per therapeutic brand that Dysutics is generating from that sum, £400,000 to £3 million of revenue per year per brand. And the reason customers are buying it and the reason it's getting traction is because of the results, which are all very measurable, given our targeted data and ability to measure the ROI. We've seen in cases that we're actually deploying 100% increase in testing. We've seen 82% of healthcare professions, that's physicians, reporting an increased understanding of the disease they're interested in. and most importantly 60%, almost 60% of patient signals have engaged and gone on to a treatment and that is the ROI that our customers see. It's the conversion from awareness of a potential patient to that patient going on to drug.

28:51 These are very tangible results. Next slide please Simon. I mentioned the market opportunity slide and I'd just like to take a few minutes to talk about this. We set this out in earlier R&S last year about the market opportunity, the number of brands and how we're looking to grow that. The way that we think about 2025 in particular was that those top boxes, so increasing the penetration in our existing market. As Ryan said earlier, we're working with some 95 therapeutic brands across 53 customers in 2025. of a total market opportunity in precision medicine of some 250.

29:36 We're making really strong progress there in terms of our ARR and a number of brands we're working with. What the investment in the 2 million of data during 2025 at the end of 2025 really enabled was us to and so forth. So that next slide is saying that it's not possible for kids to be pretty. Now that allows us Nick, we've lost you there with your sound.

30:36 Will you just put on your microphone, please? Sorry about that Simon, I think we had a network issue there. So let me continue as Ryan joins. So that investment and that decrease in cash that we saw at the end of 2025 will enable continued top line growth, continued expansion of our margins, more profitability and ultimately cash flow generation in 2026 and beyond.

31:27 The final box here as I just conclude on the addressable market is that we will see those 560 brands, so the precision medicine plus the precision for all, continue to expand over the next five years or so as more drugs come to market that are diagnostically enabled. We are seeing a growth rate of around about 13% overall in the industry and we expect that to grow from 560 to just over 1,000 by 2030. Simon, can we go to the next slide, please? I know we've included this slide in Dexco and past, and I think it's really important to articulate that there are a lot of really highly qualified individuals in our business that make this success happen and ensure that we're growing, we're innovating, and we're driving this business to really impact patient lives.

32:30 It's not just Brian, myself and Jordan that you see on these calls, there's a whole suite of individuals and indeed as at the end of 25,205 employees in total. Thanks Simon. So I'll start off by concluding just on the final slide here and then I think we're going to open up for questions just around the investment case and how we're going to continue driving customer success. Our strong competitive advantage, we talked about, Ryan talked about our unique network of labs, data that we derived from those labs, and a platform enabled by AI that's enabling us to scale and drive profitability in our business.

33:19 It's a significant and compelling value proposition for our customers, really outlined in that 59% of positions acting on in PMX, the opportunities, the patients that we're flagging to them. And in here we articulate a $100 for every $1 invested and we think that that is on the light side as proven out by some of our case studies. Our financial strength is continuing to grow, high margins, recurring revenue, high growth rates, and in 2026 and beyond, that moved to cash flow generation as well. And we have a multiple track record in precision medicine now expanding out to precision for all.

34:10 and really a blue-chip customer base that is probably the envy of many pharma services and tech companies. We're working with 18 of the top 20 global pharma customers. If we go on to the last slide, Simon, I think I'll just hand over to Ryan in case he wanted to make any final remarks. Yes. Thank you, Nick. Apologies, a bit of a technical issue for me there. We're going to pass back now to Simon. I think you're going to do some Q&A. Please. Thank you. Good afternoon. Please raise your hand if you wish to ask the question. We will endeavor to get to as many as possible online today, but should we not get to all the questions in the time that we have remaining, please do follow up with us at investorrelationsatdiastudics.com if you wish to discuss anything raised on today's webinar in more detail.

35:03 Given the number of attendees we have online today, I would ask our covering sell-side analysts to restrict your first turn to two questions, not that you'll probably listen to it. and then go back in the queue if you have any more. We will now take our first question from Chris Glasper at Singer Capital Markets. Chris, please unmute and go ahead. Yeah, afternoon guys. Hey Chris. Hey, yes, I do have more than two questions but I will limit myself. Just on the cash flow, obviously you mentioned it up front around the working capital and the change in payment terms and how that's impacting on your working capital cycle at the moment. Really just a bit of colour again on exactly what the dynamics are there, whether it's related to the longer contract durations, whether it's purely customer led and what, if anything, you can do to improve your receivables collections.

35:58 Yeah, no, great question. Thanks, Chris. And I'll let Ryan come in at the end if he wants to. But let me start off by saying, yeah, I think what we saw is customer led. If I think about the market conditions that were in 2025, so some of the pressure that pharma came under from the administrative changes that were made in the US around Tariffs and drug pricing. There was certainly a pause and that meant that their spending and therefore our revenue, our pipeline closing shifted right during 2025. That late phase in your revenue driven by, I'd say, broadly across the top 18 global pharma, an increase or a desire to increase the credit terms of us. meant that we saw that the cash shift to the right. So instead of landing in Q4, it's landed at the other side of the year end. And we expect that to, I think, continue on an ongoing basis. But we shouldn't just accept the status quo there.

36:57 There are things that we can do and things that I've asked the business to do. And that's anything from education with sales teams around using Invoice intervals and credit terms to help them with their own contract negotiations, whether it be price or term or the type of product. I've asked finance to look at ways that we can speed up contract to invoice processes and how we can recover debts quicker from customers and legal to help us around some of the commercial terms and standard terms that we set for our customers. So there's definitely behaviours that we can drive in the business and we will be driving. We have started in 2026 and I expect to see some improvements there.

37:43 And of course, as we embed ourselves with the top pharma companies and we start to move on to preferred vendor status, there is also another opportunity there to help negotiate and bring those credit terms which they've been pushing out to bring those back down to a level which we feel would be more comfortable. Thank you. And then just on M&A, obviously you've been incurring some exceptional charges, which are reasonably punchy, I guess, in the context of your business at the moment. Just a comment really on your firepower, given the lower cash levels, appreciate you've got a small overdraft facility as well, but a bit more colour on kind of what you're looking to achieve with M&A.

38:32 What kind of size of deal we might be thinking about here? Yes Chris I can come in and then maybe Nick a little bit more colour. Look ultimately as a board we are always keen to fully understand where the potential shareholder value in this business is and therefore we are exploring or have historically explored all avenues. Through 2025 we did embark on some M&A activity as it pertained to Particularly looking at US acquisition that would bolster us strategically in so many areas. Obviously we're expanding in the US in terms of our sales team and headcount.

39:20 We also have a significant level of data partners and lab partnerships in the US. the entire of our customer base in the US so it makes strategic sense for us to look at the US as a market. We identified some potential targets big and small and we've looked at a range of options for the business to ultimately grow and these are very strategically aligned to where we want to go. To do that properly It requires investment and yes you could look at the investment we made last year as significant for a business of our size but we wanted to do it right and while that's expensive it's even more expensive to do it wrong and we didn't want to end up going down the route of potentially acquiring something or trying to acquire something that wasn't the right strategic fit. So there's also a lot of value that we've got from the business in terms of that journey.

40:21 A bit harder to see that value. Some of it's less tangible and more strategic in nature. But it was very intentional. What we did was heavily supported by the board. We had the right advisors around us. And I think there's a lot of value generated through that activity. and more comfortable that we did it. Unfortunately, there isn't a deal to announce, which would obviously have justified the spend, but I think that the value that the business got is significant. Yeah, and just to add, as Ryan said, not an insignificant amount, but of course, we wouldn't have made that investment unless one, we believed it was the right thing. And secondly, we could afford to do that. And we could both in terms of The cash we have available to us and the profitability in the year. So we're still able to manage overall profitability, which is a key message to the market that we said we'd do in 2025 and we delivered on. And that's in spite of having those additional costs as well.

41:32 And they truly are exceptionals, Chris. So we wouldn't, you know, we're not going to incur those every year. Yeah. And would you expect any deal to be accretive? Would it come through you to your bottom line into cash flow or would it move you Yes, so yes, there's obviously a range of different companies to look at and some of them are pre-profit, albeit they'll be at a smaller scale. We would expect any acquisition to add to our top line and we're looking at opportunities to jump our own strategy, our own growth strategy forward one or two years and we'd have to take careful consideration around what that meant to the overall group consolidated profitability, our cash flow and that sort of thing but we made sure that it was a obviously a sustainable and accretive acquisition at that point in time.

42:32 Great thanks I'll jump back in the queue. Thanks. We'll take our next question from Natalia Webster at RBC Capital Markets. Natalia please unmute and go ahead. Hi, this is Charles Weston on for Natalia. Thanks for taking the questions. So my two, first of all, precision for all. Can you give us some examples of what precision for all would be in terms of actual potential use cases that you might be looking at that are not precision medicine? And secondly, Your data is clearly an AI's dream, but what are you doing to protect the moat around the lab data? Does the advent of AI's innovation recently make it easier for others to try and get access to the same data? And on that topic, sorry, this might be a third question.

43:35 On that topic, Are you seeing any change in the rate of consolidation of lads? Thank you. Charles, very smart way to get three questions in. So I'll answer parts two A and B. Let me begin with... Sorry, just as I said that, I forgot your first question. Just remind me the... It was examples of... Yes, of course. Yeah, thanks. So... Let me give you a few live examples. We're increasingly doing a lot of work in renal disease. Renal disease is diagnosed with lab testing of the blood. and it's quite a significant growth area for pharma today certainly is not considered precision medicine in the classic sense but we're working with some of our key customers in Reno so there's a good example and cardiovascular is another where there's a test has been around for a very long time LPA or LP little a as it's known and there are new drug targets coming to market that are are very focused on on LP little a so there's another good example of where it's a very different market approach you know this cardiovascular disease significantly higher numbers of patients than we would see typically in our kind of precision medicine rare disease area

45:08 but very aligned to what we're trying to do with precision for all and then you can really go much broader like we're starting to sell data now into the GLP-1 space where later entrants into that market are differentiating themselves by being more effective in patients with There's a classic case of a market we never thought would be applicable to our approach, but we have the data. We have more of that data now than we ever had based on some of the investment we did last year. The premise here is that we can still get to those physicians at a moment in time when their treatment decision is very relevant, i.e. right in that timeframe window.

46:01 We're not sending a sales rep in to talk to the physician like we would do in precision medicine and rare disease. We're not targeting on a per patient level like we were. but we are optimising the marketing and the outreach and promotion that these form of companies are taking and our data is second to none when it comes to that real-time targeting. On your second question around AI and ultimately the labs and then I'll talk about consolidation. One of the things that I'm not sure we've ever actually spoken to the market about is just how challenging it is to onboard some of the labs or data suppliers that we work with. It takes about two years and that two years of work is not like a technology integration that's working with them to understand that they have The data rights, do they have the right compliance models? Can they be HIPAA compliant?

47:03 Remember, a lot of the partners that we work with have never done anything with their data before. We're the first there to really engage with them. And that's, on average, a two-year journey to bring on a new partner week. We've done less of that in the last few years because we obviously really heavily invested in it through 2020, 21, 22, 23. But that still remains a significant moat and a significant hurdle for others to come. It's not just a technology requirement. to engage those partners. Remember, a lot of the data partners we work with are small, medium labs that are small volumes in themselves and less compelling. It's only an aggregate form that that makes a whole lot of sense.

47:52 So there's defensibility there as it pertains to the sheer number of partnerships we have, what that ultimately represents in terms of NF labs. and we're also leveraging AI as it pertains to making that operation more effective so we're as equally capable as anyone else as leveraging AI to make that more productive and ultimately a higher quality and we believe that given the head start we have which is very significant for this type of offering we can be a winner here from an AI perspective. and lastly your question to me was in consolidation we do see consolidation in the market and we see about five percent churn five to ten percent churn depending on the year in our lab network majority of that is due to consolidation acquisition primarily of some of the smaller labs by bigger lab chains but also we're seeing new labs created all the time and The availability of technology and the opportunity for a lab to start to offer more complex testing even if it's a small local lab is something that is a trend that we really hooked into and have benefited from over the last few years.

49:15 There's more molecular and genomic testing being done now in a local lab than ever before and that's because it's much easier due to the availability of technology and bioinformatics pipelines etc all built into the instrumentation. that a local hospital lab can run a genomic panel on their patients without having to send out to one of the big labs. That's a trend that we've double clicked on and are really benefiting from. Thanks very much. Thanks, Thomas. Thank you. We'll take our next question from Dr. Julie Simmons at Panmure Libre. Julie, please unmute and go ahead. Thank you very much. A couple of questions. Firstly, just extending on from the questions on the lab network, I'm just wondering how the lab network suits now you're shifting towards precision for all.

50:08 Is it going to be the same sorts of labs, given that it might be slightly less genetic testing from what you're talking about than maybe with your sort of historic oncology focus? There are different labs, Julie, with a different focus. And we're trying to be very intentional there in terms of where we target, as we have been historically with the lab network. We've talked in the past about the fact that we now have a multimodal data set. And what that effectively means is we're not just reliant on pure lab data anymore. We bring in other types of diagnostic data sets. So while lab is absolutely the core We are augmenting it with other types of data and that could be everything from social determinants of health data through to imaging data through to other types of data like insurance claims and EMR etc.

51:07 So the network The network of data suppliers I guess we have is broadening out and we're sticking with the lab network kind of framework and conventions but within that it is more diverse to your point and some of this data exists beyond the core labs that we would have worked with in the past. which actually brings me very nicely on to my next question which is about the cost of data that you're now building into this. Clearly there was an extra two million that came into the cost of sales this year and that number continues to rise. Is there a point at which it sort of starts to even out or is it always going to go up as a proportion of the revenue?

51:55 How do you see that happening? I'll give you my view and then I can give you the financial view of it with actual real numbers. and firstly yeah the investment in data is intentional so the cost has not increased in terms of you know the cost per data set or cost per patient and we're not seeing that we're not even seeing that rate go up at an inflationary kind of rate which is what we've modeled and so it's been fairly static where we are bringing in more data to increase our coverage or to allow us to compete in new therapeutic areas where we are buying more data to effect. And again, these are strategic calls that we're making so that the data we have today is fit for purpose to service the customers we have and grow at the 20-25% rate that we're projecting in the market.

53:01 To go beyond that, it would be prudent and we would want to invest more in data and as we're able to do that, it makes a lot of sense strategically to this business. We just need to manage that in terms of cost, EBITDA and ultimately cash generation. And there's picks and troughs and sometimes you're buying data ahead of time, have to catch up, etc. And some of that's apparent right now today. but we're certainly beyond an inflection point in terms of being able to leverage and monetise the data and we see broader opportunity with precision for all to grow and it's prudent to bring on data when it's strategically sensible for us to do so.

53:49 yeah Julie just to add to that the data spent at the end of or during 2025 important to help us open up that that time that was a significant one-off spent and that was for me to acquire retrospective data sets and really get ourselves Good Base in these precision for all medicines. The cost of that, if we decided to continue to adopt all of that data spend on an ongoing basis, wouldn't be as much as you can imagine. So you can refresh that on a quarterly or whatever basis we decide to contract with the large partners with. And as that, as we continue to invest in that, That cost would be capitalised, which has a different impact obviously on the P&L, still has the same cash impact, and we'd ensure that that is within the envelope of what we're expecting over the foreseeable future.

54:46 We saw £6.5 million worth of capitalised data spent in 2025. Some of that was a result of Duke claims data because we changed our claims provider but a large portion of that would be replicated in future years and I think we're expecting to see around that sort of six and a half million in 2026 and beyond so to your earlier question no it doesn't need to increase at the same proportion or growth rate as revenue but I think as Ryan rightly pointed out we will make strategic decisions to invest where we see it opening up further envelopes of addressable market. Thank you.

55:34 We'll take our next question from Christian Glennie at Stifel. Christian unmute and go ahead please. yeah thanks guys um in terms of uh i suppose just just first one would be following up on the on i guess the non-precision i guess mostly sort of non-oncology the extra data just to clarify is it is it are these products or offerings that you are able to to sell today or is there something that needs to work and needs to be going on in the sort of background and ultimately i suppose i'm What is the real value proposition as I guess you move into more, I guess it sounds like more sort of mass market diagnostics. What's the real value proposition to the pharma company?

56:23 And one might assume that the price point might be lower for these kind of diagnostic intel than you're finding every patient with rare disease. Thanks, Christian. Great question. So firstly, yes, this is data that's hooked up to Signal. So it's not a new product as such. It's just enabling the existing product offering to be applicable in new disease areas. But the premise of your question is correct in that we don't expect to sell Certainly we wouldn't sell a full suite of services like a PMX to one of these precision for all brands. We have modeled it that effectively what we think is going to be most applicable to them is signal plus physician engaged. You'll see us talk a lot about physician engaged.

57:18 It's a real growth area for us. and I'll talk a little bit about it in a moment but in real terms our expectation here is that the average revenue per brand for these non-precision medicine brands is going to be somewhere between four and six hundred thousand dollars and that's if they take signal and physician engaged We're not seeing a need to price it differently. And that's primarily driven by the fact that even though the ROI per patient is lower, because effectively these drugs are less expensive typically than certainly our rare disease drugs, like some of our gene therapies or precision medicine oncology. but on the flip side of that you're targeting a 10x or more in terms of patients. Some of the drugs we're working on now are applicable in millions of patients whereas in precision medicine some of the drugs we work on you know their patient forecast for the years may be 90 patients.

58:19 So what you're losing in terms of revenue per patient you're gaining back quite significantly in terms of the number of patients and these are typically much bigger brands for the pharma company in terms of overall revenue opportunity because the patient population is so significant. Pharma have already and always been buying data to support promotion and marketing of these therapeutic assets okay so the precision for all assets we're not knocking on the door saying hey you should now use data to better target your marketing or promotion and we're not chasing a single patient like we would do in precision medicine and typically our data is not being hooked up to a CRM for a field team to go and call on a physician to have an individual conversation with a patient.

59:15 What it is doing is informing physician audience work and ultimately making the marketing that the pharma company is already doing much more effective. and that's where our physician engaged tool can come in coupled with our signal data. We can have a very compelling and targeted approach to marketing that is different in use case to what we're doing in physician medicine but the premise is virtually the same. Try and get your message in front of a physician at a moment in time when they're making a treatment decision. And more importantly for us in Precision for All, it's typically more competitive. So this is enabling them to have an edge, commercial edge over competition because they can get in front of the physician faster than a competitor can.

1:00:03 and the overall lift is significant because you only need to change that by a few percentage points on the norm to have a significant increase in number of patients. Thanks and follow up please if I can it's sort of a related point just to understand your market opportunity ultimately within the within I guess the core that precision medicine as it relates to rare disease oncology typically you know you've got roughly sort of nearly 40 percent share of brands right if it's 95 or 250 but you've got sort of roughly high single digit in dollar terms of that market.

1:00:49 So has it just been sort of, is there still stubbornly resistant to sort of move that spend per brand meaningfully in your favour? Just trying to get a sense for how much you still see real sense of market opportunity here within core precision versus going after some of these adjacent opportunities. I think the growth in precision medicine is still significant and ultimately the average revenue per brand is always going to be higher. They're Christian and it's going to be, they're the brands that we have most right to win on given our association with precision medicine, our thought leadership position and effectively the evidence points that we have.

1:01:35 There are times when precision medicine can be frustrating in terms of the the number of new approvals in a year etc. You could take a year like 2024 which was a record year for new approvals and we had a 40% growth year that year. Last year that dropped away very significantly and we want to try to build in some additionality into the business model where we're not so dependent on precision medicine brand launches and the rate at which precision medicines are coming to market. There's a lot of activity but sometimes that can drop off in a period of time that is something that we want to be able to fill in. So I want to make sure that the market doesn't think that we're getting too distracted away from our core focus. We believe that everything we've learned on precision medicine is absolutely applicable beyond precision medicine.

1:02:34 It's not a model shift. It's busy doing the same thing, but doing it now in the likes of renal disease and cardiovascular, et cetera, that we spoke about. and now that we've built the scale into the data, we've built the agentic AI into the data model so it allows us to really standardise the output and the cost to us to do that is a compute cost but it's not a people cost We feel that there's a real opportunity to further sweat the asset. We've talked before about the fact that we only today sell about 20% of the data we have and I feel it's remiss of us not to explore how we would ultimately commercialise the rest of that data. We've had to invest a bit more last year to augment that to really make it compelling but now we can unlock much more of that data because we have a positioning and ultimately a product offering that can be appealing in those therapeutic areas that we have data on, but we never sold into historically.

1:03:40 Thank you, Christian. Guys, I'm conscious that we've gone a little bit over time, so apologies for that. There's a couple of questions that we didn't get to, but happy to pick up with the analysts offline. Thank you, everybody, for joining us today, and we look forward to seeing many of you on the road today and over the coming days. If there's anything we didn't get to, please reach out and contact us, and we hope you found the event useful. Thank you. Thank you Simon. Thanks. Thanks guys.